“These models have failed to make sense of the sort of extreme macroeconomic events, such as crises, recessions and depressions, which matter most to society,” – Bank of England Official Andrew Haldane.

Janet Yellen got good news from the Senate Banking Committee Thursday: The prospect of reinforcements. The panel will vote Tuesday on President Barack Obama’s three nominees for seats on the seven-seat Federal Reserve Board of Governors. That increases the odds the group will be in place in time for the Fed’s policy meeting June 18-19, when the central bank updates its interest rate and economic forecasts and Chairwoman Yellen holds her second press conference.

The Fed is now operating with four governors – Ms. Yellen, Daniel Tarullo, Jeremy Stein and Jerome Powell. The three nominees are Mr. Powell, who has been tapped for a new term, plus Stanley Fischer and Lael Brainard. Mr. Stein has announced he’ll be leaving the Fed at the end of May and returning to his post as a professor at Harvard University.

The nominees are expected to win committee approval and Senate confirmation, but a final vote by the full chamber has not been scheduled. If they are confirmed before the June meeting, the Fed’s board would then have at least five members. If they are not confirmed by then, the board would be down to just three governors.

Some analysts think Ms. Yellen could use the additional votes at Fed policy meetings. But it’s not really votes that she needs right now. The Fed is a pretty peaceful place at the moment. In the last three policy meetings there have been only two dissents. This is the smallest dissent tally for a three-meeting period since early 2011.

More important is that the new officials would help ease the workload of the governors’ day-to-day activities, for instance running board committees overseeing bank supervision, community affairs, regional Fed banks, research and other areas. The arrival of Mr. Fischer, nominated to become Fed vice chairman, would be especially important in this respect because the No. 2 central bank official often plays an important behind-the-scenes role helping the institution run smoothly.

It will also help the Fed avoid a procedural challenge. As my counterpart Robin Harding at the Financial Times has noted, Fed board members have trouble talking to each other when the board is depleted because of government sunshine laws and quorum rules. If any two officials meet with a board of just three people, the meeting would need to be announced as an official policy gathering in advance. No more stopping by the office for a chat about optimal control theory or financial stability concerns.

As the new boss with plenty on her plate, Ms. Yellen will surely welcome the help.

-By Jon Hilsenrath

MORNING MINUTES: KEY DEVELOPMENTS AROUND THE WORLD

Russia Central Bank Raises Rates. Russia’s central bank boosted interest rates Friday, in a surprise move aimed at reining in inflation while the confrontation with the West over Ukraine escalates. The decision followed hot on the heels of a downgrade of Russia’s credit rating to one notch above junk by Standard & Poor’s Ratings Services, which turned up the pressure on beleaguered Russian assets. http://on.wsj.com/1k0mFEu

ECB Constancio: Considering All Options To Stem Risks From Low Inflation. The European Central Bank is considering non-conventional instruments, including asset purchases, to stem a prolonged period of low inflation, Vice President Vitor Constancio said Thursday. “We are looking into all instruments, including non-conventional instruments such as asset purchases… in order to respond to risks that come from a very prolonged period of low inflation,” he said at a conference in Madrid. http://on.wsj.com/1jHSmRA

Japan’s Tepid Victory Over Deflation. The good news: Economists increasingly are convinced that Japan has finally slain its deflation dragon. The bad news: The victory they envision doesn’t look like much to celebrate, with a future of slow growth and painful policy choices. http://on.wsj.com/1iUyo9D

Swiss Central Bank Sees Demand for Safe Haven. For the Swiss National Bank, the world is still perceived by investors to be such a dangerous place that demand for the franc as a safe haven risks damaging the nation’s exporters. http://on.wsj.com/1fdwDoz

BOE’s Haldane Backs Broader Approach to Economics. U.K. university students pushing for an overhaul of the way economics is taught have found a powerful ally: the Bank of England’s Andy Haldane. Mr. Haldane, the BOE’s financial stability guru and soon-to-be chief economist, has written a foreword to a 60-page report produced by the University of Manchester’s Post-Crash Economics Society. “It is time to rethink some of the basic building blocks of economics,” he writes. He takes aim at the “aesthetically beautiful” economic models students learn how to construct in many undergraduate classes. “These models have failed to make sense of the sort of extreme macroeconomic events, such as crises, recessions and depressions, which matter most to society.” Economies in crisis behave more like “slime descending a warehouse wall” than the orderly machines predicted in neoclassical models, he says.http://on.wsj.com/1iiuym2

Banks Cut Lending For 7th Straight Quarter, BIS Says. Banks cut their international lending for the seventh straight quarter in the three months to December, with financial institutions based in the euro zone once again leading the retrenchment, according to the Bank for International Settlements. The Basel-based group of central banks Thursday said cross-border lending by banks fell by $93 billion in the fourth quarter of last year, a 0.3% drop from the three-months to September. That brought the cumulative decline in international lending since the end of March 2012 to $2.3 trillion, or 7.7%. http://on.wsj.com/1nsp7sy

Senate Banking Committee to Vote on Fed Nominees on April 29. The Senate Banking Committee said it will vote next Tuesday on three of President Barack Obama‘s nominees for the Federal Reserve Board of Governors, including Stanley Fischer, his choice for vice chairman. The committee vote on the nominations of Mr. Fischer, former chief of the Bank of Israel; Lael Brainard, a former Treasury official; and Jerome Powell, a current Fed governor nominated for another term. The are expected to be approved by the committee and confirmed by the full Senate, though no final vote has been scheduled. http://on.wsj.com/1rps7Ua

Demand for Home Loans Plunges. Mortgage lending declined to the lowest level in 14 years in the first quarter as homeowners pulled back sharply from refinancing and house hunters showed little appetite for new loans, the latest sign of how rising interest rates have dented the housing recovery. http://http://on.wsj.com/1lNwSFp

Turkey’s Central Bank Holds Rates Despite Pressure For Cuts. Turkey’s central bank resisted government pressures to loosen up, and kept key interest rates steady at its monthly meeting Thursday. The result: a market rally and a chorus of economists singing Governor Erdem Basci’s praises for bolstering the bank’s credibility. The lira briefly extended gains past 1% to 2.1279 per dollar after policymakers in Ankara kept the benchmark one-week repo rate of 10% and the overnight lending rate of 12% unchanged for a third consecutive month since January’s aggressive emergency hikes. “The tight monetary policy stance will be maintained until there there is a significant improvement in the inflation outlook,” the central bank said. http://on.wsj.com/1fuReQ4

Investors Embrace ‘Catastrophe Bonds’. Insurance companies are taking advantage of the appetite for high-yielding debt by selling bonds that can force investors to help pay for the cost of natural disasters. With the U.S. hurricane season about a month away, insurers are issuing “catastrophe bonds” at the fastest clip since before the financial crisis. Insurers sell the bonds to help cover potential claims from hurricanes, tornadoes, earthquakes and other major insured risks. While losses on so-called cat bonds have been rare over the years, investors can forfeit both interest payments and their principal if disaster costs exceed designated levels, which gives insurers the right to tap the funds. http://on.wsj.com/1ka2aqp

China’s Central Bank Looks for Better Monetary-Measuring Tools. Three years after China’s central bank unveiled a new measure to calculate the amount of credit in the economy, it may be going back to the drawing board. http://on.wsj.com/1nMlAm8

Commodity Markets Shift to Brighter View of China.World commodity markets are turning more positive toward China as the country continues to import massive amounts of resources such as iron ore, copper and soybeans even as economic growth slows. Fears of a hard landing for China’s economy, which grew at its slowest pace in 18 months in the first quarter, have driven prices for many commodities sharply lower this year. That has compounded broad price declines since 2011, spurred by China’s decelerating economy and a wave of new supply of many raw materials. Now, many investors and analysts are betting prices have bottomed. They contend China’s government is likely to avert an economic meltdown and that growth will stabilize at current levels around 7%. While that is below the double-digit expansions of the past decade, the economy is now so large it will continue to suck in rising quantities of raw materials for years to come, they argue. http://on.wsj.com/1nK60aE

GRAPHIC CONTENT

Wall Street investors spend a lot of time and money trying to figure out just what indicators the Federal Reserve is likely to stress in its policy making decisions about interest rates and bond buys. The Dallas Fed has been kind – and transparent – enough, to share theirs with us. This is gives some perspective on what may be informing the decisions of Dallas Fed President Richard Fisher, an inflation hawk and also a voter on this year’s Federal Open Market Committee.

FORWARD GUIDANCE

- The Bank of Mexico holds a policy meeting

COMMENTARY

Maybe Fed Bond Buys Were Helping A Little More than You Thought. Jared Bernstein, former chief economist for Vice President Joe Biden, is coming out in defense of the Fed’s bond buys, or large-scale asset purchases. “One cannot help but notice the recent slowdown in the housing recovery and one further cannot help but wonder about the extent to which Fed actions to pull back on their LSAPs is implicated in said slowdown, though there are of course other moving parts here,” Mr. Bernstein writes on his blog. http://jaredbernsteinblog.com/maybe-qe-was-helping-a-little-more-than-you-thought/ECB Action in Play—But Not in The Bag. The evidence that the ECB might launch another round of monetary stimulus over the coming months is growing. But it’s still far from conclusive, writes WSJ columnist Alen Mattich. “Mr Draghi argued that unwarranted tightening of market conditions would prompt the ECB into action. The ECB has been particularly concerned about the euro’s strength lately. But although the single currency is up some 5% on where it was a year ago on a trade-weighted basis and up 14% on its lows of the summer of 2012, it is still well below its 2008 and 2009 highs.” At the same time, lower sovereign debt yields across the region have “created a substantial loosening of monetary conditions,” he writes. http://on.wsj.com/1f8cGzQ

Time Has Come for Unconventional Monetary Policy Silvia Merler of the Bruegel think tank says that since banks are repaying funds borrowed under the European Central Bank’s Long-Term Refinancing Operations in order to cleanse themselves of the stigma associated with such a reliance on public sector support, “the time has come for truly unconventional monetary policy.” http://www.bruegel.org/nc/blog/detail/article/1310-shrinking-times

BASISPOINTS

-Demand for big-ticket factory items rose a seasonally adjusted 2.6% in March from February, the biggest jump since November. Excluding the volatile transportation category, orders still climbed 2%, the largest gain since January 2013. http://on.wsj.com/1jWICEk

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